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Shining More Light on Energy Efficiency and Green Building

This article was contributed by Samantha Alexander, contributor to the blog. The blog serves as a resource center for insurance consumers and homebuyers across the country.


Going solar produces obvious benefits for the environment and for your pocketbook – you already know you can save money while eliminating or at least reducing your consumption of electricity that comes from fossil fuels. People who take advantage of solar power should also investigate other green components for their homes. What they’ll find is that sustainable construction can mean savings in other facets – including home insurance.

Solar roofThat’s because many sustainable materials and construction methods also tend to make homes sturdier and less vulnerable to fires and flooding. That means owners of those green homes are less likely to file claims, which makes them desirable to insurance providers. Often, they get lower premiums as a result of following green practices.

Lower the Chance of Fire

Fire claims are among the largest that home insurers face. Unfortunately, they’re also among the most common. The National Fire Protection Association says a residential fire occurs in the U.S. every 82 seconds. Claims in those fires average $30,000. Many of the fires are caused in older homes that use fuse boxes and ungrounded electrical outlets.

Homes built or renovated with energy efficiency use circuit breakers and modern wiring that is much less likely to spark a house fire. That means the houses are much safer and much more attractive to home insurance providers.

Another major cause of residential fire is an outdated air conditioning system. The NFPA says about 2,500 house fires a year are caused by faulty HVAC systems. Installing a new, green system will reduce your fire risk while saving you energy.

Cut the Risk of Water Damage

The other major component of that antique heating, ventilation, and air conditioning system is the heating unit. If it fails during the coldest part of the year – and isn’t that always the time they fail – it can result in frozen and then burst pipes. Those burst pipes are the third most common cause of homeowner property losses, according to the Insurance Information Institute (III). The damage from burst pipes tops more than $5 billion annually, it says.

In addition to installing a new HVAC system, simply updating your plumbing system can lower the likelihood of you filing a claim due to water damage and save you money on your water bill each month.
While the prospect of burst pipes is bad enough, toilets are plumbing enemy #1. Toilet failures account for 90% of all water claims in homes that are 10 years or older, which means you might want to update your home with low-flow toilets so you aren’t flushing money down too.

Which Way the Wind Blows

One of the more interesting facts that came to light after Superstorm Sandy involves wind and solar panels. The IEEE – the Institute of Electrical and Electronics Engineers – reported only limited instances of damaged solar panels in New Jersey in the aftermath of the storm, despite that state’s heavy commitment to solar energy.

Solar panels protect and extend the life of your roofIn fact, mounting solar panels on the roof often extends its life because they offer additional protection. The high-strength tempered glass resists most hail strikes, and most

Green roofs, even those without solar panels, generally stand up better to strong winds, hail, and rain – in part because they rely heavily on recycled building materials such as steel and aluminum. Those are some of the strongest, most durable and fire-resistant metals used in construction.

Roof damage is present in as many as 95% of wind and water related insurance losses, according to The Insurance Institute for Business and Home Safety. So when you update your roof to withstand weather, you are also helping reduce your risk of expensive property damage and insurance claims. Again, it could make your insurance provider happy – the average weather-related claim tops $6,000, the III says.

Other Advantages of Going Sustainable

Put safety and insurance risk aside and there are still glaring benefits of going green. One University of California study reported the resale value of certified-green homes averages about 9% higher than comparable, noncertified homes, and the U.S. Department of Energy reports that Energy Star appliances help homeowners save up to $400 a year on utilities.

Green homeowners are also less risky for mortgage lenders. A study released this year by the Institute for Market Transformation actually found that Energy Star-certified homes were 32% less likely to go into mortgage default.

One reminder: If you’re renovating your home to add energy-efficient features, make sure to let your home insurance provider know. Any renovation could increase the value of your home, which could affect what you pay for coverage. But you also could be able to leverage the risk-reducing factors of your home’s new environmentally sensitive features to pay lower home insurance premiums. Going green can keep more green in your bank account.

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